US Declares 'Semiconductor One Team'... Provides SK Siltron with 720 Billion Won Loan Support

US Approves Loans to Expand Semiconductor Manufacturing
SK Siltron CSS Expands SiC Wafer Production
First Year of AI 10-Year Cycle... "A Completely New Industry"

SK Siltron, a wafer (semiconductor substrate) manufacturer, has received conditional loan approval from the U.S. Department of Energy. With Intel declaring its intention to strengthen its foundry (semiconductor contract manufacturing) business in the U.S., there is analysis suggesting that the U.S. is beginning to accelerate the formation of a semiconductor "one team."

An SK Siltron CSS employee holding a silicon carbide (SiC) wafer /
[Photo by Yonhap News]

The Loan Programs Office (LPO) under the U.S. Department of Energy announced on the 22nd (local time) that it has approved a conditional loan of $544 million (approximately 723 billion KRW) to SK Siltron's U.S. production subsidiary, SK Siltron CSS. SK Siltron CSS produces silicon carbide (SiC) wafers necessary for manufacturing next-generation power semiconductors used in electric vehicles at its Bay City plant in Michigan. The loan funds will be used to expand SiC wafer production.

The semiconductor industry views this loan support as part of the U.S. government's efforts to expand its domestic semiconductor manufacturing base. Previously, in November 2022, U.S. President Joe Biden visited the SK Siltron CSS Bay City plant and emphasized, "We will not rely on semiconductor chips made overseas," adding, "The semiconductor supply chain will be in the U.S." This statement reflected the intention to expand the domestic footprint amid a manufacturing base heavily concentrated overseas in Asia and other regions.

An SK Siltron official also stated, "The U.S. is increasing various supports to expand its domestic semiconductor manufacturing base," adding, "This loan approval can be seen as part of that ongoing effort."

This decision drew particular attention as it came shortly after Intel announced plans to strengthen its foundry business, including having Microsoft (MS) as a customer. The U.S. is actively working to expand its domestic semiconductor manufacturing base, emphasizing a public-private semiconductor "one team." On the 21st (local time), U.S. Secretary of Commerce Gina Raimondo stressed at the ‘IFS (Intel Foundry Services) Direct Connect’ event held at the McEnery Convention Center in San Jose that "advanced chips essential for the AI era must be relocated from Asia to the U.S. (manufacturing base)."

The private sector is supporting this effort. At the same event, MS surprised attendees by announcing that it will entrust its AI chip manufacturing to Intel Foundry. Intel CEO Pat Gelsinger also expressed at the same event, "We hope Nvidia, Qualcomm, and AMD will also become Intel Foundry customers," extending an invitation to U.S. fabless (semiconductor design) companies.

Gina Raimondo, U.S. Secretary of Commerce, spoke via video at the 'IFS (Intel Foundry Service) Direct Connect' event held on the 21st (local time) at the McEnery Convention Center in San Jose, California. /
Photo by Yonhap News

The semiconductor industry predicts that the AI semiconductor market, now entering its introductory phase, will become a "black hole" for orders in the U.S. Nvidia CEO Jensen Huang explained during a conference call after announcing the Q4 fiscal 2024 results (November 2023 to January 2024), "It has been one year since the start of generative AI development," adding, "We are entering the first year of a 10-year cycle to expand this technology across all industries." He expressed a positive outlook, saying, "I believe Nvidia will achieve much greater growth going forward." He also referred to AI as a completely new industry.

Domestic companies are closely monitoring these market changes. SK Hynix is expected to accelerate its investment in packaging facilities in the U.S. SK Hynix can perform post-processing (packaging) work for high-bandwidth memory (HBM) used with AI semiconductors at its U.S. plant but has not yet released detailed plans. It is currently in the process of selecting related sites.

Samsung Electronics views its foundry plant under construction in Taylor, Texas, as helpful in increasing the number of fabless customers in the U.S. However, with Intel aggressively expanding its foundry business locally supported by government aid, fierce competition is anticipated.

A semiconductor industry insider explained, "Although Intel is trying to grow its foundry business by partnering with MS, it is still only a declaration at this point," adding, "To enhance actual competitiveness against TSMC and Samsung Electronics, there will be many challenges such as securing customer trust and ensuring stable quality." He continued, "However, since the U.S. government is showing a strong will to grow domestic semiconductor manufacturing, it is necessary to continuously observe what impact this will have on domestic companies."

This content was produced with the assistance of AI translation services.